scholarly journals Incentive Contracts in Two-Sided Moral Hazards with Multiple Agents

1997 ◽  
Vol 74 (1) ◽  
pp. 174-195 ◽  
Author(s):  
Nabil I. Al-Najjar
Keyword(s):  
Incentive Contracts ◽  
Multiple Agents ◽  
Moral Hazards

scholarly journals Delegating performance evaluation

2020 ◽  
Vol 15 (2) ◽  
pp. 477-509 ◽  
Author(s):  
Igor Letina ◽  
Shuo Liu ◽  
Nick Netzer
Keyword(s):  
Performance Evaluation ◽  
Incentive Contracts ◽  
Multiple Agents ◽  
Research Grants ◽  
Worker Compensation ◽  
Leniency Bias ◽  
All Pay Auction

We study optimal incentive contracts with multiple agents when performance is evaluated by a reviewer. The reviewer may be biased in favor of the agents, but the degree of bias is unknown to the principal. We show that a contest, which is a contract in which the principal fixes a set of prizes to be allocated to the agents, is optimal. By using a contest, the principal can commit to sustaining incentives despite the reviewer's potential leniency bias. The optimal effort profile can be uniquely implemented by an all‐pay auction with a cap. Our analysis has implications for various applications, such as the design of worker compensation or the allocation of research grants.

Optimal incentive contracts with multiple agents

1984 ◽  
Vol 33 (1) ◽  
pp. 152-171 ◽  
Author(s):  
Joel S Demski ◽  
David Sappington
Keyword(s):  
Incentive Contracts ◽  
Multiple Agents

An optimum multiple outcomes sharing model with multiple risk-averse agents

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
S. Mahdi Hosseinian ◽  
Elham Farahpour ◽  
David G. Carmichael
Keyword(s):  
Incentive Contracts ◽  
Complex Nature ◽  
Multiple Agents ◽  
Multiple Outcomes ◽  
Private Companies ◽  
Content Type ◽  
Construction Contracts ◽  
Proposed Model ◽  
Underlying Basis ◽  
Level Of Effort

PurposeThe purpose of this paper is to propose an optimum form of incentive contracts with multiple outcomes and multiple agents.Design/methodology/approachUtility theory and principal-agent theory provide the underlying basis for this paper. A sample of 60 practitioners from public organizations and private companies participated in an exercise to validate the proposed model.FindingsThe paper shows that, in outcome sharing contracts, the contributions of agents toward outcomes are positively related, while agent effort costs, outcome uncertainty, outcome correlation and agent level of risk aversion are negatively related. The paper further demonstrates that outcome sharing is positively associated with the level of effort selected by the agents.Originality/valueOutcome sharing models might be used in construction contracts to encourage the agent to act in the interests of the principal. However, few studies have looked at contracts with multiple outcomes and multiple agents. This paper contributes to the current practice of contract management through simplifying the complex nature of multiple incentive contracts and providing theoretical guidance for multi arrangements.

An Epistemic Model for Moral Hazards in Scientific Enterprises

2000 ◽  
Author(s):  
Jean Maria Arrigo ◽  
Maj-Britt Juhl Poulsen
Keyword(s):  
Moral Hazards ◽  
Epistemic Model

School Consolidations and Teacher Incentive Contracts

2008 ◽  
Author(s):  
Aaron Lowen ◽  
M. Ryan Haley ◽  
Nancy J. Burnett
Keyword(s):  
Incentive Contracts
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